Amended in Senate August 18, 2015

Amended in Senate July 16, 2015

Amended in Senate July 9, 2015

Amended in Senate June 19, 2015

Amended in Senate June 8, 2015

Amended in Assembly April 20, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1531

Introduced by Committee on Environmental Safety and Toxic Materials (Assembly Members Alejo (Chair), Gonzalez, McCarty, and Ting)

March 23, 2015

An act to amend Sections 6103.4 and 53082.5 of the Government Code, to amend Sections 116270, 116275, begin delete 116380, end delete begin insert 116551, end insert 116650, 116655, 116735, 116751, 116760.20, 116761.20, 116761.65, and 117125 of, to add Sections 116365.03, 116701, and 116760.38 to, to repeal Section 116379 of, and to repeal and add Section 116761.70 of, the Health and Safety Code, and to amend Sections 13176, 13177, 13177.5, 13177.6, 13178, 13181, 13275, 13285, 13304.1, 13392, 13392.5, 13393.5, 13400, 13426, 13476, 13477.6, 13480, and 79702 of, to add Section 79726 to, and to repeal Section 13331.2 of, the Water Code, relating to water, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1531, as amended, Committee on Environmental Safety and Toxic Materials. State Water Resources Control Board.

(1) Existing law, the California Safe Drinking Water Act (state act), requires the State Water Resources Control Board to administer provisions relating to the regulation of drinking water to protect public health. The state board’s duties include, but are not limited to, conducting research, studies, and demonstration programs relating to the provision of a dependable, safe supply of drinking water, enforcing the federal Safe Drinking Water Act (federal act), and adopting and enforcing regulations. Existing law requires the state board to appoint a deputy director to oversee the issuance and enforcement of public water system permits and delegates certain authorities of the state board to the deputy director.

This bill would authorize the state board to adopt as an emergency regulation, a regulation that is not more stringent than, and is not materially different in substance and effect than, the requirements of a regulation promulgated under the federal act, with a specified exception. The bill would require that these emergency regulations not be subject to review by the Office of Administrative Law and remain in effect until revised by the state board.

begin delete

The state act prohibits the state board from issuing a permit to a public water system or amending a valid existing permit to allow the use of point-of-use treatment unless the state board determines that there is no community opposition to the installation of the treatment device.

end delete begin delete

This bill would authorize the state board to adopt regulations, similar to those previously authorized for adoption by the State Department of Public Health, governing the use of point-of-entry and point-of-use treatment by a public water system with less than 200 service connections in lieu of centralized treatment where it can be demonstrated that centralized treatment is not immediately economically feasible.

end delete

The state act authorizes the deputy director to issue an order directing certain actions whenever the deputy director determines that a person has violated or is violating the act, or any permit, regulation, or standard issued or adopted pursuant to the act. The act authorizes an aggrieved party 30 days after service of a copy of the order or decision to file with the superior court a petition for a writ of mandate for review of the order or decision.

The bill would authorize, within 30 days of issuance of a certain order or decision issued by the deputy director, an aggrieved person to petition the state board for reconsideration and would authorize the state board to refuse to reconsider the order or decision, to deny the petition, or to set aside or modify the order or decision, as specified. The bill would provide that the filing of a petition for reconsideration is an administrative remedy that must be exhausted before filing a petition for writ of mandate.

The state act authorizes the state board to take certain actions relating to the inspection of public water systems, including inspecting and copying any records, reports, test results, or other information required to carry out the provisions of the act. Existing law makes it a crime for any person to knowingly commit certain acts, including making a false statement or representation in any application, record, report, or other document submitted, maintained, or used for the purposes of compliance with the act or withholding information requested by the state board regarding imminent and substantial danger to the public health or safety, as specified.

This bill would require an owner of a public water system to provide to the state board reports, test results, and certain other information within 15 business days of receiving a request for those records from a duly authorized representative of the state board. To the extent that a person knowingly makes a false statement or representation when providing these reports, results, or information to the state board, this bill would expand the scope of a crime and thereby impose a state-mandated local program.

This bill would declare the intent of the Legislature that the state act be construed to ensure consistency with the requirements for states to obtain and maintain primary enforcement responsibility for public water systems under the federal act.

(2) Existing law generally grants various powers to cities, counties, and certain special districts, including the power to issue bonds and incur indebtedness for certain purposes and subject to certain restrictions. Existing law authorizes counties, cities, and special districts that provide or intend to provide wastewater treatment facilities or services, subject to applicable constitutional restrictions, to borrow money and incur indebtedness for purposes of the State Water Pollution Control Revolving Fund.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, continuously appropriates state and federal funds in the Safe Drinking Water State Revolving Fund to the State Water Resources Control Board for grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards. The revolving fund law defines “public agency,” for purposes of the act, to mean a city, county, city and county, joint powers authority, or other political subdivision of the state, that owns or operates a public water system.

This bill would expand the definition of “public agency” to include a municipality, as defined in the federal act. The bill would extend the authorization to borrow money and incur indebtedness to cities, counties, and special districts that provide or intend to provide water treatment facilities or services and for purposes of the Safe Drinking Water State Revolving Fund or the California Safe Drinking Water Act.

This bill would require certain funds, appropriated and available for grants and loans for public water system infrastructure improvements and related actions, as specified, to be available for deposit in the revolving fund for the purpose of providing the state share needed to leverage federal funds to assist communities in providing safe drinking water.

The revolving fund law requires the state board to annually establish the interest rate for repayable financing made pursuant to these provisions, as specified. The revolving fund law authorizes the State Water Resources Control Board to undertake certain actions to implement the revolving fund law, including engaging in the transfer of capitalization grant funds, as specified. Existing law prohibits more than 4% of the capitalization grant from being used by the state board for administering the revolving fund law and authorizes the state board to establish a reasonable schedule for administrative fees to be paid by the grant applicant to reimburse the state for the costs of the administration of these provisions.

The bill would delete the requirement that the state board establish the interest rate annually and would instead authorize the state board to adjust the interest rate periodically. The bill would delete the prohibition against using more than 4% of the capitalization grant for administrating the Safe Drinking Water Revolving Fund Law and would delete the authorization permitting the state board to establish a reasonable schedule for administrative fees. The bill would instead create the Safe Drinking Water State Revolving Fund Administrative Fund and would require moneys transferred to pay for the costs incurred by the state board for administering the act, moneys collected for financial assistance services, and interest earned upon these moneys to be deposited into the fund. The bill would authorize, where financial assistance is made and is to be repaid to the state board, the state board to assess an annual charge for financial assistance services, not to exceed 1% of the financial assistance balance. The bill would make moneys in the administration fund available to the state board, upon appropriation by the Legislation, for payment of reasonable costs of administering the fund. The bill would require the state board to set the total amount of revenue that is collected each year though the annual charge for financial assistance services at an amount that is equal as practicable to the appropriation amount set forth in the annual Budget Act. The bill would require, at least once each fiscal year, the state board to adjust the financial assistance service charge to conform with the annual Budget Act.

Existing law requires the state board to determine what portion of the full costs a public agency or private begin delete not-for profit end delete begin insert not-for-profit end insert water company is capable of repaying, and authorizes the state board, to the extent the state board finds that the public agency or not-for-profit water company is able to repay the full costs of the financing, to authorize a grant or principal forgiveness. Notwithstanding those and other specified provisions, existing law deems a small community water system or nontransient noncommunity water system that is owned by a public agency or a private not-for-profit water company and serving a severely disadvantaged community to have no ability to repay any financing.

This bill would, notwithstanding those same provisions, instead deem a public agency or private not-for-profit water company that serves a severely disadvantaged community with fewer than 200 service connections and that owns a small community water system or nontransient noncommunity water system to have no ability to repay any financing, as specified.

Existing law creates the State Water Pollution Control Revolving Fund Small Community Grant Fund in the State Treasury, and requires moneys from specified sources to be deposited in the grant fund. Existing law requires a specified amount of money to be available for deposit in the State Water Pollution Control Revolving Fund Small Community Grant Fund for grants for wastewater treatment projects.

This bill would specifically require those moneys to be deposited in the grant fund, and would authorize those moneys to be expended for technical assistance, as specified, in addition to other specified uses.

(3) Existing law, the Porter-Cologne Water Quality Control Act, establishes the State Water Pollution Control Revolving Fund program pursuant to which state and federal funds are continuously appropriated from the State Water Pollution Control Revolving Fund to the state board for permissible purposes authorized by the federal Clean Water Act or a federal capitalization grant deposited into the fund, including loans and other financial assistance for the construction of publicly owned treatment works by a municipality, the implementation of a management program, the development and implementation of a conservation and management plan, and other related purposes in accordance with the federal Clean Water Act and the Porter-Cologne Water Quality Control Act.

This bill would instead require that moneys in the fund be used only for purposes allowed by the federal Clean Water Act or a federal grant, and would delete the specifications of the types of projects and programs eligible for this financial assistance. By allowing moneys in the fund to be used for purposes allowed by a federal grant, thereby expanding the purposes for which moneys in a continuously appropriated revolving fund may be expended, this bill would make an appropriation.

Existing law requires the loans to meet certain criteria, including full amortization not later than 20 years after project completion, unless otherwise authorized by a federal capitalization grant deposited into the fund. Existing law also authorizes loan forgiveness to the extent it is authorized by a federal capitalization grant deposited into the fund.

The bill would extend the loan amortization requirement to not later than 30 years after project completion unless otherwise authorized by a federal grant deposited in the fund and would authorize loan forgiveness to the extent it is authorized by a federal grant deposited into the fund without regard to whether it is a capitalization grant.

Existing law also authorizes moneys in the fund to be used for payment of the reasonable cost of administering the fund and conducting certain activities relating to the federal Clean Water Act. Existing law prohibits those costs from exceeding 4% of all federal contributions into the fund except, if permitted by federal and state law, interest payments into the fund and other moneys into the fund are authorized to be used to defray additional administrative and activity costs.

The bill would instead prohibit the costs used for administering the fund and conducting the federal Clean Water Act activities from exceeding 4% of all federal contributions in the fund, $400,000 per year, or 1⁄5 of 1% per year of the current valuation of the fund, whichever is greater, plus the amount of fees collected by the state for these purposes, regardless of source.

(4) This bill would make various nonsubstantive changes, including repealing obsolete provisions and updating cross-references.

(5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 6103.4 of the Government Code is
amended to read:

6103.4.  

Section 6103 does not apply to any fee or charge for
official services required by any of the following:

(a) The Environmental Laboratory Accreditation Act (Article
3 (commencing with Section 100825) of Chapter 4 of Part 1 of
Division 101 of the Health and Safety Code).

(b) Article 3 (commencing with Section 106875) of Chapter 4
of Part 1 of Division 104 of the Health and Safety Code.

(c) The California Safe Drinking Water Act (Chapter 4
(commencing with Section 116270) of Part 12 of Division 104 of
the Health and Safety Code).

(d) The Safe Drinking Water State Revolving Fund Law of 1997
(Chapter 4.5 (commencing with Section 116760) of Part 12 of
Division 104 of the Health and Safety Code).

(e) Article 2 (commencing with Section 116800) and Article 3
(commencing with Section 116825) of Chapter 5 of Part 12 of
Division 104 of the Health and Safety Code.

(f) Part 5 (commencing with Section 4999) of Division 2 of the
Water Code.

(g) Division 7 (commencing with Section 13000) of the Water
Code.

SEC. 2.  

Section 53082.5 of the Government Code is amended
to read:

53082.5.  

Subject to all applicable constitutional restrictions, a
county, a city, or a special district that provides, or intends to
provide, water or wastewater treatment facilities or services may
borrow money and incur indebtedness pursuant to Chapter 4.5
(commencing with Section 116760) of Part 12 of Division 104 of
the Health and Safety Code or Chapter 6.5 (commencing with
Section 13475) of Division 7 of the Water Code.

SEC. 3.  

Section 116270 of the Health and Safety Code is
amended to read:

116270.  

The Legislature finds and declares all of the following:

(a)  Every resident of California has the right to pure and safe
drinking water.

(b)  Feasible and affordable technologies are available and shall
be used to remove toxic contaminants from public water supplies.

(c)  According to the State Department of Health Services, over
95 percent of all large public water systems in California are in
compliance with health-based action levels established by the
department for various contaminants.

(d)  It is the policy of the state to reduce to the lowest level
feasible all concentrations of toxic chemicals that, when present
in drinking water, may cause cancer, birth defects, and other
chronic diseases.

(e)  This chapter is intended to ensure that the water delivered
by public water systems of this state shall at all times be pure,
wholesome, and potable. This chapter provides the means to
accomplish this objective.

(f)  It is the intent of the Legislature to improve laws governing
drinking water quality, to improve upon the minimum requirements
of the federal Safe Drinking Water Act Amendments of 1996, to
establish primary drinking water standards that are at least as
stringent as those established under the federal Safe Drinking
Water Act, and to establish a program under this chapter that is
more protective of public health than the minimum federal
requirements.

(g)  It is the further intent of the Legislature to establish a
drinking water regulatory program within the state board to provide
for the orderly and efficient delivery of safe drinking water within
the state and to give the establishment of drinking water standards
and public health goals greater emphasis and visibility within the
state.

(h) This act shall be construed to ensure consistency with the
requirements for states to obtain and maintain primary enforcement
responsibility for public water systems under the federal Safe
Drinking Water Act and acts amendatory thereof or supplementary
thereto.

SEC. 4.  

Section 116275 of the Health and Safety Code is
amended to read:

116275.  

As used in this chapter:

(a) “Contaminant” means any physical, chemical, biological,
or radiological substance or matter in water.

(b) “Department” means the state board.

(c) “Primary drinking water standards” means:

(1) Maximum levels of contaminants that, in the judgment of
the state board, may have an adverse effect on the health of persons.

(2) Specific treatment techniques adopted by the state board in
lieu of maximum contaminant levels pursuant to subdivision (j)
of Section 116365.

(3) The monitoring and reporting requirements as specified in
regulations adopted by the state board that pertain to maximum
contaminant levels.

(d) “Secondary drinking water standards” means standards that
specify maximum contaminant levels that, in the judgment of the
state board, are necessary to protect the public welfare. Secondary
drinking water standards may apply to any contaminant in drinking
water that may adversely affect the odor or appearance of the water
and may cause a substantial number of persons served by the public
water system to discontinue its use, or that may otherwise adversely
affect the public welfare. Regulations establishing secondary
drinking water standards may vary according to geographic and
other circumstances and may apply to any contaminant in drinking
water that adversely affects the taste, odor, or appearance of the
water when the standards are necessary to ensure a supply of pure,
wholesome, and potable water.

(e) “Human consumption” means the use of water for drinking,
bathing or showering, hand washing, oral hygiene, or cooking,
including, but not limited to, preparing food and washing dishes.

(f) “Maximum contaminant level” means the maximum
permissible level of a contaminant in water.

(g) “Person” means an individual, corporation, company,
association, partnership, limited liability company, municipality,
public utility, or other public body or institution.

(h) “Public water system” means a system for the provision of
water for human consumption through pipes or other constructed
conveyances that has 15 or more service connections or regularly
serves at least 25 individuals daily at least 60 days out of the year.
A public water system includes the following:

(1) Any collection, treatment, storage, and distribution facilities
under control of the operator of the system that are used primarily
in connection with the system.

(2) Any collection or pretreatment storage facilities not under
the control of the operator that are used primarily in connection
with the system.

(3) Any water system that treats water on behalf of one or more
public water systems for the purpose of rendering it safe for human
consumption.

(i) “Community water system” means a public water system
that serves at least 15 service connections used by year-long
residents or regularly serves at least 25 year-long residents of the
area served by the system.

(j) “Noncommunity water system” means a public water system
that is not a community water system.

(k) “Nontransient noncommunity water system” means a public
water system that is not a community water system and that
regularly serves at least 25 of the same persons over six months
per year.

(l) “Local health officer” means a local health officer appointed
pursuant to Section 101000 or a local comprehensive health agency
designated by the board of supervisors pursuant to Section 101275
to carry out the drinking water program.

(m) “Significant rise in the bacterial count of water” means a
rise in the bacterial count of water that the state board determines,
by regulation, represents an immediate danger to the health of
water users.

(n) “State small water system” means a system for the provision
of piped water to the public for human consumption that serves at
least five, but not more than 14, service connections and does not
regularly serve drinking water to more than an average of 25
individuals daily for more than 60 days out of the year.

(o) “Transient noncommunity water system” means a
noncommunity water system that does not regularly serve at least
25 of the same persons over six months per year.

(p) “User” means a person using water for domestic purposes.
User does not include a person processing, selling, or serving water
or operating a public water system.

(q) “Waterworks standards” means regulations adopted by the
state board entitled “California Waterworks Standards” (Chapter
16 (commencing with Section 64551) of Division 4 of Title 22 of
the California Code of Regulations).

(r) “Local primacy agency” means a local health officer that
has applied for and received primacy delegation pursuant to Section
116330.

(s) “Service connection” means the point of connection between
the customer’s piping or constructed conveyance, and the water
system’s meter, service pipe, or constructed conveyance. A
connection to a system that delivers water by a constructed
conveyance other than a pipe shall not be considered a connection
in determining if the system is a public water system if any of the
following apply:

(1) The water is used exclusively for purposes other than
residential uses, consisting of drinking, bathing, and cooking, or
other similar uses.

(2) The state board determines that alternative water to achieve
the equivalent level of public health protection provided by the
applicable primary drinking water regulation is provided for
residential or similar uses for drinking and cooking.

(3) The state board determines that the water provided for
residential or similar uses for drinking, cooking, and bathing is
centrally treated or treated at the point of entry by the provider, a
passthrough entity, or the user to achieve the equivalent level of
protection provided by the applicable primary drinking water
regulations.

(t) “Resident” means a person who physically occupies, whether
by ownership, rental, lease, or other means, the same dwelling for
at least 60 days of the year.

(u) “Water treatment operator” means a person who has met
the requirements for a specific water treatment operator grade
pursuant to Section 106875.

(v) “Water treatment operator-in-training” means a person who
has applied for and passed the written examination given by the
state board but does not yet meet the experience requirements for
a specific water treatment operator grade pursuant to Section
106875.

(w) “Water distribution operator” means a person who has met
the requirements for a specific water distribution operator grade
pursuant to Section 106875.

(x) “Water treatment plant” means a group or assemblage of
structures, equipment, and processes that treats, blends, or
conditions the water supply of a public water system for the
purpose of meeting primary drinking water standards.

(y) “Water distribution system” means any combination of pipes,
tanks, pumps, and other physical features that deliver water from
the source or water treatment plant to the consumer.

(z) “Public health goal” means a goal established by the Office
of Environmental Health Hazard Assessment pursuant to
subdivision (c) of Section 116365.

(aa) “Small community water system” means a community
water system that serves no more than 3,300 service connections
or a year-long population of no more than 10,000 persons.

(ab) “Disadvantaged community” means the entire service area
of a community water system, or a community therein, in which
the median household income is less than 80 percent of the
statewide average.

(ac) “State board” means the State Water Resources Control
Board.

(ad) “Deputy director” means the deputy director appointed by
the state board pursuant to subdivision (k) of Section 116271.

SEC. 5.  

Section 116365.03 is added to the Health and Safety
Code, to read:

116365.03.  

The state board may adopt as an emergency
regulation, a regulation, except a regulation that establishes
maximum contaminant levels for primary and secondary drinking
water standards, that is not more stringent than, and is not
materially different in substance and effect than, the requirements
of a regulation promulgated pursuant to the federal Safe Drinking
Water Act (42 U.S.C. Sec. 300f et seq.). The adoption of a
regulation pursuant to this section is an emergency and shall be
considered by the Office of Administrative Law as necessary for
the immediate preservation of the public peace, health, safety, and
general welfare. Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, an emergency regulation adopted by the state board pursuant
to this section is not subject to review by the Office of
Administrative Law and shall remain in effect until revised by the
state board.

SEC. 6.  

Section 116379 of the Health and Safety Code is
repealed.

begin delete

SEC. 7.  

Section 116380 of the Health and Safety Code is
amended to read:

116380.  

(a) In addition to the requirements set forth in Section
116375, the regulations adopted by the state board pursuant to
Section 116375 may include requirements governing the use of
point-of-entry and point-of-use treatment by public water systems
with less than 200 service connections in lieu of centralized
treatment where it can be demonstrated that centralized treatment
is not immediately economically feasible.

(b) The regulations shall comply with Section 116552 and the
requirements set forth in subdivision (a), but shall not be subject
to the rulemaking provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code). The regulations
shall take effect when filed with the Secretary of State, and shall
be published in the California Code of Regulations.

end delete

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 116551 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

116551.  

The begin delete department end delete begin insert state board end insert shall not issue a permit
to a public water system or amend a valid existing permit for the
use of a reservoir as a source of supply that is directly augmented
with recycled water, as defined in subdivision (n) of Section 13050
of the Water Code, unless the begin delete department end delete begin insert state board end insert does all of
the following:

(a)  Performs an engineering evaluation that evaluates the
proposed treatment technology and finds that the proposed
technology will ensure that the recycled water meets begin delete or exceeds end delete
all applicable primary and secondary drinking water standards and
poses no significant threat to public health.

(b)  Holds at least three duly noticed public hearings in the area
where the recycled water is proposed to be used or supplied for
human consumption to receive public testimony on that proposed
use. The begin delete department end delete begin insert state board end insert shall make available to the public,
not less than 10 days prior to the date of the first hearing held
pursuant to this subdivision, the evaluations and findings made
pursuant to subdivision (a).

SEC. 8.  

Section 116650 of the Health and Safety Code is
amended to read:

116650.  

(a) If the state board determines that a public water
system is in violation of this chapter or any regulation, permit,
standard, citation, or order issued or adopted thereunder, the state
board may issue a citation to the public water system. The citation
shall be served upon the public water system personally or by
certified mail. Service shall be deemed effective as of the date of
personal service or the date of receipt of the certified mail. If a
person to whom a citation is directed refuses to accept delivery of
the certified mail, the date of service shall be deemed to be the
date of mailing.

(b) Each citation shall be in writing and shall describe the nature
of the violation or violations, including a reference to the statutory
provision, standard, order, citation, permit, or regulation alleged
to have been violated.

(c) A citation may specify a date for elimination or correction
of the condition constituting the violation.

(d) A citation may include the assessment of a penalty as
specified in subdivision (e).

(e) The state board may assess a penalty in an amount not to
exceed one thousand dollars ($1,000) per day for each day that a
violation occurred, and for each day that a violation continues to
occur. A separate penalty may be assessed for each violation and
shall be in addition to any liability or penalty imposed under any
other law.

SEC. 9.  

Section 116655 of the Health and Safety Code is
amended to read:

116655.  

(a)  Whenever the state board determines that any
person has violated or is violating this chapter, or any order, permit,
regulation, or standard issued or adopted pursuant to this chapter,
the state board may issue an order doing any of the following:

(1)  Directing compliance forthwith.

(2)  Directing compliance in accordance with a time schedule
set by the state board.

(3)  Directing that appropriate preventive action be taken in the
case of a threatened violation.

(b)  An order issued pursuant to this section may include, but
shall not be limited to, any or all of the following requirements:

(1)  That the existing plant, works, or system be repaired, altered,
or added to.

(2)  That purification or treatment works be installed.

(3)  That the source of the water supply be changed.

(4)  That no additional service connection be made to the system.

(5)  That the water supply, the plant, or the system be monitored.

(6)  That a report on the condition and operation of the plant,
works, system, or water supply be submitted to the state board.

SEC. 10.  

Section 116701 is added to the Health and Safety
Code, to read:

116701.  

(a) Within 30 days of issuance of an order or decision
issued by the deputy director under Article 8 (commencing with
Section 116625) or Article 9 (commencing with Section 116650),
an aggrieved person may petition the state board for
reconsideration. Where the order or decision of the deputy director
is issued after a hearing under Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code,
this section shall apply instead of Section 11521 of the Government
Code.

(b) The petition shall include the name and address of the
petitioner, a copy of the order or decision for which the petitioner
seeks reconsideration, identification of the reason the petitioner
alleges the issuance of the order was inappropriate or improper,
the specific action the petitioner requests, and other information
as the state board may prescribe. The petition shall be accompanied
by a statement of points and authorities of the legal issues raised
by the petition.

(c) The evidence before the state board shall consist of the record
before the deputy director and any other relevant evidence that, in
the judgment of the state board, should be considered to implement
the policies of this chapter. The state board may, in its discretion,
hold a hearing for receipt of additional evidence.

(d) The state board may refuse to reconsider the order or
decision if the petition fails to raise substantial issues that are
appropriate for review, may deny the petition upon a determination
that the issuance of the order or decision was appropriate and
proper, may set aside or modify the order or decision, or take other
appropriate action. The state board’s action pursuant to this
subdivision shall constitute the state board’s completion of its
reconsideration.

(e) The state board, upon notice and hearing, if a hearing is held,
may stay in whole or in part the effect of the order or decision of
the deputy director.

(f) If an order of the deputy director is subject to reconsideration
under this section, the filing of a petition for reconsideration is an
administrative remedy that must be exhausted before filing a
petition for writ of mandate under Section 116625 or 116700.

SEC. 11.  

Section 116735 of the Health and Safety Code is
amended to read:

116735.  

(a)  (1) In order to carry out the purposes of this
chapter, begin delete any end delete begin insert a end insert duly authorized representative of the state board
may, at begin delete any end delete begin insert a end insert reasonable hour of the day, do any of the following:

(A) Enter and inspect begin delete any end delete begin insert a end insert public water system or begin delete any end delete begin insert a end insert place
where the public water system records are stored, kept, or
maintained.

(B) Inspect and copy begin delete any end delete records, reports, test results, or other
information required to carry out this chapter.

(C) Set up and maintain monitoring equipment for purposes of
assessing compliance with this chapter.

(D) Obtain samples of the water supply.

(E) Photograph begin delete any end delete begin insert a end insert portion of the system, begin delete any end delete activity, or begin delete any end delete
begin insert a end insert sample taken.

(2) An owner of a public water system shall provide to the state
board reports, test results, and other information required to carry
out this chapter within 15 business days of receiving a request for
those records from a duly authorized representative of the state
board.

(b) The state board shall inspect each public water system as
follows:

(1) A system with any surface water source with treatment shall
be inspected annually.

(2) A system with any groundwater source subject to treatment
with only groundwater sources shall be inspected biennially.

(3) A system with only groundwater sources not subject to
treatment shall be inspected every three years.

(c) Nothing in this section shall prohibit the state board from
inspecting public water systems on a more frequent basis. An
opportunity shall be provided for a representative of the public
water system to accompany the representative of the state board
during the inspection of the water system.

(d)  It shall be a misdemeanor for begin delete any end delete begin insert a end insert person to prevent,
interfere with, or attempt to impede in any way begin delete any end delete begin insert a end insert duly
authorized representative of the state board from undertaking the
activities authorized by paragraph (1) of subdivision (a). A person
who violates paragraph (2) of subdivision (a) shall be subject to
the provisions of Section 116730, as applicable.

SEC. 12.  

Section 116751 of the Health and Safety Code is
amended to read:

116751.  

The Department of Fish and Wildlife shall not
introduce a poison to a drinking water supply for purposes of
fisheries management unless the state board determines that the
activity will not have a permanent adverse impact on the quality
of the drinking water supply or wells connected to the drinking
water supply. In making this determination, the state board shall
evaluate the short- and long-term health effects of the poison in
drinking water, ensure that an alternative supply of drinking water
is provided to the users of the drinking water supply while the
activity takes place, and, in cooperation with the Department of
Fish and Wildlife, develop and implement a monitoring program
to ensure that no detectable residuals of the poison, breakdown
products, and other components of the poison formulation remain
in the drinking water supply or adjoining wells after the activity
is completed.

SEC. 13.  

Section 116760.20 of the Health and Safety Code is
amended to read:

116760.20.  

Unless the context otherwise requires, the following
definitions govern the construction of this chapter:

(a) “Acceptable result” means the project that, when constructed,
solves the problem for which the project was placed on the project
priority list, ensures the owner and operator of the improved or
restructured public water system shall have long-term technical,
managerial, and financial capacity to operate and maintain the
public water system in compliance with state and federal safe
drinking water standards, can provide a dependable source of safe
drinking water long-term, and is both short-term and long-term
affordable, as determined by the board.

(b) “Administrative fund” means the Safe Drinking Water State
Revolving Fund Administration Fund created by Section
116761.70.

(c) “Board” means the State Water Resources Control Board.

(d) “Cost-effective” means achieves an acceptable result at the
most reasonable cost.

(e) “Disadvantaged community” means a community that meets
the definition provided in Section 116275.

(f) “Federal Safe Drinking Water Act” or “federal act” means
the federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et seq.)
and acts amendatory thereof or supplemental thereto.

(g) “Fund” means the Safe Drinking Water State Revolving
Fund created by Section 116760.30.

(h) “Financing” means financial assistance awarded under this
chapter, including loans, refinancing, installment sales agreements,
purchase of debt, loan guarantees for municipal revolving funds,
and grants.

(i) “Matching funds” means state money that equals that
percentage of federal contributions required by the federal act to
be matched with state funds.

(j) “Project” means cost-effective facilities for the construction,
improvement, or rehabilitation of a public water system. It also
may include the planning and design of the facilities, annexation
or consolidation of water systems, source water assessments, source
water protection, and other activities specified under the federal
act.

(k) “Public agency” means any city, county, city and county,
whether general law or chartered, district, joint powers authority,
or other political subdivision of the state, that owns or operates a
public water system, or any municipality, as that term is defined
in the federal act.

(l) “Public water system” or “public water supply system” means
a system for the provision to the public of water for human
consumption, as defined in Section 116275.

(m) “Safe drinking water standards” means those standards
established pursuant to Chapter 4 (commencing with Section
116270), as they may now or hereafter be amended.

(n) “Severely disadvantaged community” means a community
with a median household income of less than 60 percent of the
statewide average.

(o) “Small community water system” has the meaning set forth
in Section 116275.

(p) “Supplier” means any person, partnership, corporation,
association, public agency, or other entity that owns or operates a
public water system.

SEC. 14.  

Section 116760.38 is added to the Health and Safety
Code, to read:

116760.38.  

Subject to all applicable constitutional restrictions,
a city, county, or special district may borrow money and incur
indebtedness pursuant to this chapter.

SEC. 15.  

Section 116761.20 of the Health and Safety Code is
amended to read:

116761.20.  

(a) Planning and preliminary engineering studies,
project design, and construction costs incurred by community and
not-for-profit noncommunity public water systems may be funded
under this chapter by loans or other repayable financing, and, if
these systems are owned by public agencies or private not-for-profit
water companies, by grants, principal forgiveness, or a combination
of grants and loans or other financial assistance.

(b) (1) The board shall determine what portion of the full costs
the public agency or private not-for-profit water company is
capable of repaying and authorize funding in the form of a loan
or other repayable financing for that amount. The board shall
authorize a grant or principal forgiveness only to the extent the
board finds the public agency or not-for-profit water company is
unable to repay the full costs of the financing.

(2) Notwithstanding any other provision of this chapter, where
a public agency or private not-for-profit water company serving
a severely disadvantaged community with fewer than 200 service
connections owns a small community water system or nontransient
noncommunity water system, the public agency or private
not-for-profit serving the severely disadvantaged community is
deemed to have no ability to repay any financing for a project
serving the severely disadvantaged community.

(c) At the request of the board, the Public Utilities Commission
shall submit comments concerning the ability of suppliers, subject
to its jurisdiction, to finance the project from other sources and to
repay the financing.

SEC. 16.  

Section 116761.65 of the Health and Safety Code is
amended to read:

116761.65.  

(a) The board shall establish, and may periodically
adjust, the interest rate for repayable financing made pursuant to
this chapter at a rate not to exceed 50 percent of the average interest
rate, computed by the true interest cost method, paid by the state
on general obligation bonds issued in the prior calendar year,
rounded up to the closest one-tenth of 1 percent.

(b) Notwithstanding subdivision (a), if the financing is for a
public water system that serves a disadvantaged community with
a financial hardship as determined by the board or if the financing
is for a public water system that provides matching funds, the
interest rate shall be 0 percent.

SEC. 17.  

Section 116761.70 of the Health and Safety Code is
repealed.

SEC. 18.  

Section 116761.70 is added to the Health and Safety
Code, to read:

116761.70.  

(a) The Safe Drinking Water State Revolving Fund
Administration Fund is hereby created in the State Treasury.

(b) The following moneys shall be deposited into the
administration fund:

(1) Moneys transferred to pay the costs incurred by the state
board in connection with the administration of this chapter.

(2) The amounts collected for financial assistance services
pursuant to subdivision (c).

(3) Notwithstanding Section 16475 of the Government Code,
any interest earned upon the moneys in the fund.

(c) (1) For financial assistance made pursuant to this chapter,
where that financial assistance is to be repaid to the state board,
the state board may assess an annual charge for financial assistance
services with regard to the financial assistance, not to exceed 1
percent of the financial assistance balance, computed according
to the true interest cost method.

(2) The financial assistance service rate authorized by this
subdivision may be applied at any time during the term of the
financial assistance, and once applied, shall remain unchanged for
the duration of the financial assistance and shall not increase the
financial assistance repayment amount, as set forth in the terms
and conditions imposed pursuant to this chapter.

(d) Upon appropriation by the Legislature, moneys in the
administration fund may be expended by the state board for
payment of the reasonable costs of administering the fund.

(e) The state board shall set the total amount of revenue collected
each year through the charge authorized by subdivision (c) at an
amount that is equal as practicable to the appropriation amount set
forth in the annual Budget Act for this activity. At least once each
fiscal year, the state board shall adjust the financial assistance
service charge imposed pursuant to subdivision (c) to conform
with the appropriation amount set forth in the annual Budget Act.

SEC. 19.  

Section 117125 of the Health and Safety Code is
amended to read:

117125.  

Notwithstanding any other law, the Department of
Fish and Wildlife may stock with fish any body of water opened
to public fishing pursuant to this article.

SEC. 20.  

Section 13176 of the Water Code is amended to read:

13176.  

(a) (1) The analysis of any material required by this
division shall be performed by a laboratory that has accreditation
or certification pursuant to Article 3 (commencing with Section
100825) of Chapter 4 of Part 1 of Division 101 of the Health and
Safety Code.

(2) This requirement does not apply to field tests, such as tests
for color, odor, turbidity, pH, temperature, dissolved oxygen,
conductivity, and disinfectant residual.

(b) A person or public entity of the state shall not contract with
a laboratory for environmental analyses required by paragraph (1)
of subdivision (a) unless the laboratory has valid accreditation or
certification.

SEC. 21.  

Section 13177 of the Water Code is amended to read:

13177.  

(a) It is the intent of the Legislature that the state board
continue to implement the California State Mussel Watch Program.

(b) The Legislature finds and declares that the California State
Mussel Watch Program provides the following benefits to the
people of the state:

(1) An effective method for monitoring the long-term effects
of certain toxic substances in selected fresh, estuarine, and marine
waters.

(2) An important element in the state board’s comprehensive
water quality monitoring strategy.

(3) Identification, on an annual basis, of specific areas where
concentrations of toxic substances are higher than normal.

(4) Valuable information to guide the state and regional boards
and other public and private agencies in efforts to protect water
quality.

(c) To the extent funding is appropriated for this purpose, the
state board, in conjunction with the Department of Fish and
Wildlife, shall continue to implement the long-term coastal
monitoring program known as the California State Mussel Watch
Program. The program may consist of, but is not limited to, the
following elements:

(1) Removal of mussels, clams, and other aquatic organisms
from relatively clean coastal sites and placing them in sampling
sites. For purposes of this section, “sampling sites” means selected
waters of concern to the state board and the Department of Fish
and Wildlife.

(2) After specified exposure periods at the sampling sites,
removal of the aquatic organisms for analysis.

(3) Laboratory analysis of the removed aquatic organisms to
determine the amounts of various toxic substances that may have
accumulated in the bodies of the aquatic organisms.

(4) Making available both the short- and long-term results of
the laboratory analysis to appropriate public and private agencies
and the public.

SEC. 22.  

Section 13177.5 of the Water Code is amended to
read:

13177.5.  

(a) The state board, in consultation with the Office
of Environmental Health Hazard Assessment, shall develop a
comprehensive coastal monitoring and assessment program for
sport fish and shellfish, to be known as the Coastal Fish
Contamination Program. The program shall identify and monitor
chemical contamination in coastal fish and shellfish and assess the
health risks of consumption of sport fish and shellfish caught by
consumers.

(b) The state board shall consult with the Department of Fish
and Wildlife, the Office of Environmental Health Hazard
Assessment, and regional water quality control boards with
jurisdiction over territory along the coast, to determine chemicals,
sampling locations, and the species to be collected under the
program. The program developed by the state board shall include
all of the following:

(1) Screening studies to identify coastal fishing areas where fish
species have the potential for accumulating chemicals that pose
significant health risks to human consumers of sport fish and
shellfish.

(2) The assessment of at least 60 screening study monitoring
sites and 120 samples in the first five years of the program and an
assessment of additional screening study sites as time and resources
permit.

(3) Comprehensive monitoring and assessment of fishing areas
determined through screening studies to have a potential for
significant human health risk and a reassessment of these areas
every five years.

(c) Based on existing fish contamination data, the state board
shall designate a minimum of 40 sites as fixed sampling locations
for the ongoing monitoring effort.

(d) The state board shall contract with the Office of
Environmental Health Hazard Assessment to prepare
comprehensive health risk assessments for sport fish and shellfish
monitored in the program. The assessments shall be based on the
data collected by the program and information on fish consumption
and food preparation. The Office of Environmental Health Hazard
Assessment, within 18 months of the completion of a
comprehensive study for each area by the state board, shall submit
to the board a draft health risk assessment report for that area.
Those health risk assessments shall be updated following the
reassessment of areas by the board.

(e) The Office of Environmental Health Hazard Assessment
shall issue health advisories when the office determines that
consuming certain fish or shellfish presents a significant health
risk. The advisories shall contain information for the public, and
particularly the population at risk, concerning health risks from
the consumption of the fish or shellfish. The office shall notify the
appropriate county health officers, the State Department of Public
Health, and the Department of Fish and Wildlife before the
issuance of a health advisory. The notification shall provide
sufficient information for the purpose of posting signage. The
office shall urge county health officers to conspicuously post health
warnings in areas where contaminated fish or shellfish may be
caught including piers, commercial passenger fishing vessels, and
shore areas where fishing occurs. The Department of Fish and
Wildlife shall publish the office’s health warnings in its Sport
Fishing Regulations Booklet.

SEC. 23.  

Section 13177.6 of the Water Code is amended to
read:

13177.6.  

To the extent funding is appropriated for this purpose,
the state board, in consultation with the Department of Fish and
Wildlife and Office of Environmental Health Hazard Assessment,
shall perform a monitoring study to reassess the geographic
boundaries of the commercial fish closure off the Palos Verdes
Shelf. The reassessment shall include collection and analysis of
white croaker caught on the Palos Verdes Shelf, within three miles
south of the Shelf, and within San Pedro Bay. Based on the results
of the reassessment, the Department of Fish and Wildlife, with
guidance from the Office of the Environmental Health Hazard
Assessment, shall redelineate, if necessary, the commercial fish
closure area to protect the health of consumers of commercially
caught white croaker. The sample collection and analysis shall be
conducted within 18 months of the enactment of this section and
the reassessment of the health risk shall be conducted within 18
months of the completion of the analysis of the samples.

SEC. 24.  

Section 13178 of the Water Code is amended to read:

13178.  

(a) The state board, in conjunction with the State
Department of Public Health and a panel of experts established by
the state board, shall develop source investigation protocols for
use in conducting source investigations of storm drains that produce
exceedences of bacteriological standards established pursuant to
subdivision (c) of Section 115880 of the Health and Safety Code.
The protocols shall be based upon the experiences drawn from
previous source investigations performed by the state board,
regional boards, or other agencies, and other available data. The
protocols shall include methods for identifying the location and
biological origins of sources of bacteriological contamination, and,
at a minimum, shall require source investigations if bacteriological
standards are exceeded in any three weeks of a four-week period,
or, for areas where testing is done more than once a week, 75
percent of testing days that produce an exceedence of those
standards.

(b) The development of source investigation protocols pursuant
to subdivision (a) is not subject to Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.

SEC. 25.  

Section 13181 of the Water Code is amended to read:

13181.  

(a) (1) On or before December 1, 2007, the California
Environmental Protection Agency and the Natural Resources
Agency shall enter into a memorandum of understanding for the
purposes of establishing the California Water Quality Monitoring
Council, which shall be administered by the state board.

(2) As used in this section, “monitoring council” means the
California Water Quality Monitoring Council established pursuant
to this section.

(3) The monitoring council may include representatives from
state entities and nonstate entities. The representatives from
nonstate entities may include, but need not be limited to,
representatives from federal and local government, institutions of
higher education, the regulated community, citizen monitoring
groups, and other interested parties.

(4) The monitoring council shall review existing water quality
monitoring, assessment, and reporting efforts, and shall recommend
specific actions and funding needs necessary to coordinate and
enhance those efforts.

(5) (A) The recommendations shall be prepared for the ultimate
development of a cost-effective, coordinated, integrated, and
comprehensive statewide network for collecting and disseminating
water quality information and ongoing assessments of the health
of the state’s waters and the effectiveness of programs to protect
and improve the quality of those waters.

(B) For purposes of developing recommendations pursuant to
this section, the monitoring council shall initially focus on the
water quality monitoring efforts of state agencies, including, but
not limited to, the state board, the regional boards, the department,
the Department of Fish and Wildlife, the California Coastal
Commission, the State Lands Commission, the Department of
Parks and Recreation, the Department of Forestry and Fire
Protection, and the Department of Pesticide Regulation.

(C) In developing the recommendations, the monitoring council
shall seek to build upon existing programs, rather than create new
programs.

(6) Among other things, the memorandum of understanding
shall describe the means by which the monitoring council shall
formulate recommendations to accomplish both of the following:

(A) Reduce redundancies, inefficiencies, and inadequacies in
existing water quality monitoring and data management programs
in order to improve the effective delivery of sound, comprehensive
water quality information to the public and decisionmakers.

(B) Ensure that water quality improvement projects financed
by the state provide specific information necessary to track project
effectiveness with regard to achieving clean water and healthy
ecosystems.

(b) The monitoring council shall report, on or before December
1, 2008, to the California Environmental Protection Agency and
the Natural Resources Agency with regard to its recommendations
for maximizing the efficiency and effectiveness of existing water
quality data collection and dissemination, and for ensuring that
collected data are maintained and available for use by
decisionmakers and the public. The monitoring council shall
consult with the United States Environmental Protection Agency
in preparing these recommendations. The monitoring council’s
recommendations, and any responses submitted by the California
Environmental Protection Agency or the Natural Resources Agency
to those recommendations, shall be made available to
decisionmakers and the public by means of the Internet.

(c) The monitoring council shall undertake and complete, on or
before April 1, 2008, a survey of its members to develop an
inventory of their existing water quality monitoring and data
collection efforts statewide and shall make that information
available to the public.

(d) All state agencies, including institutions of higher education
to the extent permitted by law, that collect water quality data or
information shall cooperate with the California Environmental
Protection Agency and the Natural Resources Agency in achieving
the goals of the monitoring council as described in this section.

(e) In accordance with the requirements of the federal Clean
Water Act (33 U.S.C. Sec. 1251 et seq.) and implementing
guidance, the state board shall develop, in coordination with the
monitoring council, all of the following:

(1) A comprehensive monitoring program strategy that utilizes
and expands upon the state’s existing statewide, regional, and other
monitoring capabilities and describes how the state will develop
an integrated monitoring program that will serve all of the state’s
water quality monitoring needs and address all of the state’s waters
over time. The strategy shall include a timeline not to exceed 10
years to complete implementation. The strategy shall be
comprehensive in scope and identify specific technical, integration,
and resource needs, and shall recommend solutions for those needs
so that the strategy may be implemented within the 10-year
timeframe.

(2) Agreement, including agreement on a schedule, with regard
to the comprehensive monitoring of statewide water quality
protection indicators that provide a basic minimum understanding
of the health of the state’s waters. Indicators already developed
pursuant to environmental protection indicators for statewide
initiatives shall be given high priority as core indicators for
purposes of the network described in subdivision (a).

(3) Quality management plans and quality assurance plans that
ensure the validity and utility of the data collected.

(4) Methodology for compiling, analyzing, and integrating
readily available information, to the maximum extent feasible,
including, but not limited to, data acquired from discharge reports,
volunteer monitoring groups, local, state, and federal agencies,
and recipients of state-funded or federally funded water quality
improvement or restoration projects.

(5) An accessible and user-friendly electronic data system with
timely data entry and ready public access via the Internet. To the
maximum extent possible, the geographic location of the areas
monitored shall be included in the data system.

(6) Production of timely and complete water quality reports and
lists that are required under Sections 303(d), 305(b), 314, and 319
of the federal Clean Water Act and Section 406 of the federal
Beaches Environmental Assessment and Coastal Health Act of
2000, that include all available information from discharge reports,
volunteer monitoring groups, and local, state, and federal agencies.

(7) An update of the state board’s surface water ambient
monitoring program needs assessment in light of the benefits of
increased coordination and integration of information from other
agencies and information sources. This update shall include
identification of current and future resource needs required to fully
implement the coordinated, comprehensive monitoring network,
including, but not limited to, funding, staff, training, laboratory
and other resources, and projected improvements in the network.

(f) The state board shall identify the full costs of implementation
of the comprehensive monitoring program strategy developed
pursuant to subdivision (e), and shall identify proposed sources of
funding for the implementation of the strategy, including federal
funds that may be expended for this purpose. Fees collected
pursuant to paragraph (1) of subdivision (d) of Section 13260 may
be used as a funding source for implementation of the strategy to
the extent that the funding is consistent with subparagraph (B) of
paragraph (1) of subdivision (d) of Section 13260.

(g) Data, summary information, and reports prepared pursuant
to this section shall be made available to appropriate public
agencies and the public by means of the Internet.

(h) (1) Commencing December 1, 2008, the Secretary of the
California Environmental Protection Agency shall conduct a
triennial audit of the effectiveness of the monitoring program
strategy developed pursuant to subdivision (e). The audit shall
include, but need not be limited to, an assessment of the following
matters:

(A) The extent to which the strategy has been implemented.

(B) The effectiveness of the monitoring and assessment program
and the monitoring council with regard to both of the following:

(i) Tracking improvements in water quality.

(ii) Evaluating the overall effectiveness of programs
administered by the state board or a regional board and of state
and federally funded water quality improvement projects.

(2) The Secretary of the California Environmental Protection
Agency shall consult with the Secretary of the Natural Resources
Agency in preparing the audit, consistent with the memorandum
of understanding entered into pursuant to subdivision (a).

(i) The state board shall prioritize the use of federal funding
that may be applied to monitoring, including, but not limited to,
funding under Section 106 of the Federal Water Pollution Control
Act, for the purpose of implementing this section.

(j) The state board shall not use more than 5 percent of the funds
made available to implement this section for the administrative
costs of any contracts entered into for the purpose of implementing
this section.

SEC. 26.  

Section 13275 of the Water Code is amended to read:

13275.  

(a) Notwithstanding any other law, a public water
system regulated by the state board pursuant to Chapter 4
(commencing with Section 116270) of Part 12 of Division 104 of
the Health and Safety Code shall have the same legal rights and
remedies against a responsible party, when the water supply used
by that public water system is contaminated, as those of a private
land owner whose groundwater has been contaminated.

(b) For purposes of this section, “responsible party” has the
same meaning as defined in Section 25323.5 of the Health and
Safety Code.

SEC. 27.  

Section 13285 of the Water Code is amended to read:

13285.  

(a) A discharge from a storage tank, pipeline, or other
container of methyl tertiary-butyl ether (MTBE), or of any pollutant
that contains MTBE, that poses a threat to drinking water, or to
groundwater or surface water that may reasonably be used for
drinking water, or to coastal waters shall be cleaned up to a level
consistent with subdivisions (a) and (b) of Section 25296.10 of
the Health and Safety Code.

(b) (1) A public water system, or its customers, shall not be
responsible for remediation or treatment costs associated with
MTBE, or a product that contains MTBE. However, the public
water system may, as necessary, incur MTBE remediation and
treatment costs and include those costs in its customer rates and
charges that are necessary to comply with drinking water standards
or directives of the state board or other lawful authority. A public
water system that incurs MTBE remediation or treatment costs
may seek recovery of those costs from parties responsible for the
MTBE contamination, or from other available alternative sources
of funds.

(2) If the public water system has included the costs of MTBE
treatment and remediation in its customer rates and charges, and
subsequently recovers all, or a portion of, its MTBE treatment and
remediation costs from responsible parties or other available
alternative sources of funds, it shall make an adjustment to its
schedule of rates and charges to reflect the amount of funding
received from responsible parties or other available alternative
sources of funds for MTBE treatment or remediation.

(3) Paragraph (1) does not prevent the imposition of liability
on any person for the discharge of MTBE if that liability is due to
the conduct or status of that person independently of whether the
person happens to be a customer of the public water system.

SEC. 28.  

Section 13304.1 of the Water Code is amended to
read:

13304.1.  

(a) A groundwater cleanup system that commences
operation on or after January 1, 2002, and that is required to obtain
a discharge permit from the regional board pursuant to the regional
board’s jurisdiction, and that discharges treated groundwater to
surface water or groundwater, shall treat the groundwater to
standards approved by the regional board, consistent with this
division and taking into account the beneficial uses of the receiving
water and the location of the discharge and the method by which
the discharge takes place.

(b) In making its determination of the applicable water quality
standards to be achieved by the operator of a groundwater cleanup
system that commences operation on or after January 1, 2002, that
draws groundwater from an aquifer that is currently being used,
or has been used at any time since 1979 as a source of drinking
water supply by the owner or operator of a public water system,
and that discharges treated groundwater to surface water or
groundwater from which a public water system draws drinking
water, the regional board shall consult with the affected
groundwater management entity, if any, affected public water
systems, and the state board to ensure that the discharge, spreading,
or injection of the treated groundwater will not adversely affect
the beneficial uses of any groundwater basin or surface water body
that is or may be used by a public water system for the provision
of drinking water.

SEC. 29.  

Section 13331.2 of the Water Code is repealed.

SEC. 30.  

Section 13392 of the Water Code is amended to read:

13392.  

The state board and the regional boards, in consultation
with the State Department of Public Health and the Department
of Fish and Wildlife, shall develop and maintain a comprehensive
program to (1) identify and characterize toxic hot spots, as defined
in Section 13391.5, (2) plan for the cleanup or other appropriate
remedial or mitigating actions at the sites, and (3) amend water
quality control plans and policies to incorporate strategies to
prevent the creation of new toxic hot spots and the further pollution
of existing hot spots. As part of this program, the state board and
regional boards shall, to the extent feasible, identify specific
discharges or waste management practices that contribute to the
creation of toxic hot spots, and shall develop appropriate prevention
strategies, including, but not limited to, adoption of more stringent
waste discharge requirements, onshore remedial actions, adoption
of regulations to control source pollutants, and development of
new programs to reduce urban and agricultural runoff.

SEC. 31.  

Section 13392.5 of the Water Code is amended to
read:

13392.5.  

(a) Each regional board that has regulatory authority
for one or more enclosed bays or estuaries shall, on or before
January 30, 1994, develop for each enclosed bay or estuary, a
consolidated database that identifies and describes all known and
potential toxic hot spots. Each regional board shall, in consultation
with the state board, also develop an ongoing monitoring and
surveillance program that includes, but is not limited to, the
following components:

(1) Establishment of a monitoring and surveillance task force
that includes representation from agencies, including, but not
limited to, the State Department of Public Health and the
Department of Fish and Wildlife, that routinely monitor water
quality, sediment, and aquatic life.

(2) Suggested guidelines to promote standardized analytical
methodologies and consistency in data reporting.

(3) Identification of additional monitoring and analyses that are
needed to develop a complete toxic hot spot assessment for each
enclosed bay and estuary.

(b) Each regional board shall make available to state and local
agencies and the public all information contained in the
consolidated database, as well as the results of new monitoring
and surveillance data.

SEC. 32.  

Section 13393.5 of the Water Code is amended to
read:

13393.5.  

On or before January 30, 1994, the state board, in
consultation with the State Department of Public Health and the
Department of Fish and Wildlife, shall adopt general criteria for
the assessment and priority ranking of toxic hot spots. The criteria
shall take into account the pertinent factors relating to public health
and environmental quality, including, but not limited to, potential
hazards to public health, toxic hazards to fish, shellfish, and
wildlife, and the extent to which the deferral of a remedial action
will result, or is likely to result, in a significant increase in
environmental damage, health risks, or cleanup costs.

SEC. 33.  

Section 13400 of the Water Code is amended to read:

13400.  

As used in this chapter, unless otherwise apparent from
the context:

(a) “Facilities” means any of the following:

(1) Facilities for the collection, treatment, or export of waste
when necessary to prevent water pollution.

(2) Facilities to recycle wastewater and to convey recycled
water.

(3) Facilities or devices to conserve water.

(4) Any combination of the facilities described in paragraph
(1), (2), or (3).

(b) “Fund” means the State Water Quality Control Fund.

(c) “Not-for-profit organization” means an organization operated
on a not-for-profit basis, including, but not limited to, an
association, cooperative, or private corporation that is a public
water system, as defined in Section 116275 of the Health and
Safety Code, that meets technical, managerial, and financial
capacity criteria specified by the state board for public water
systems, or that is subject to regulatory authority pursuant to this
division.“Not-for-profit organization” includes only an organization
that is either controlled by a local public body or bodies or has a
broadly based ownership by, or membership of, people of the local
community.

(d) “Public agency” means any city, county, city and county,
district, or other political subdivision of the state.

SEC. 34.  

Section 13426 of the Water Code is amended to read:

13426.  

The state board, subject to approval by the Director of
Finance, may agree to provide a guarantee pursuant to this article
for all or a specified part of the proposed local agency bond issue
upon making all of the following determinations:

(a) The facilities proposed by an applicant are necessary to the
health or welfare of the inhabitants of the state and are consistent
with water quality control plans adopted by regional boards.

(b) The proposed facilities meet the needs of the applicant.

(c) The proposed bond issue and plan repayment are sound and
feasible.

(d) In the case of facilities proposed under paragraph (2) of
subdivision (a) of Section 13400, the facilities will produce
recycled water and the applicant has adopted a feasible program
for the use of the facilities. The state board may adopt criteria for
ranking and setting priorities among applicants for those
guarantees.

SEC. 35.  

Section 13476 of the Water Code is amended to read:

13476.  

Unless the context otherwise requires, the following
definitions govern the construction of this chapter:

(a) “Administration fund” means the State Water Pollution
Control Revolving Fund Administration Fund.

(b) “Board” means the State Water Resources Control Board.

(c) “Federal Clean Water Act” or “federal act” means the Clean
Water Act (33 U.S.C. Sec. 1251 et seq.) and acts amendatory
thereof or supplemental thereto.

(d) (1) “Financial assistance” means assistance authorized under
Section 13480. Financial assistance includes loans, refinancing,
installment sales agreements, purchase of debt, and loan guarantees
for municipal revolving funds, but excludes grants.

(2) Notwithstanding paragraph (1), financial assistance may
include grants or other assistance directed by a federal grant
deposited in the fund to the extent authorized and funded by that
grant.

(e) “Fund” means the State Water Pollution Control Revolving
Fund.

(f) “Grant fund” means the State Water Pollution Control
Revolving Fund Small Community Grant Fund.

(g) “Matching funds” means money that equals that percentage
of federal contributions required by the federal act to be matched
with state funds.

(h) “Municipality” has the same meaning and construction as
in the federal act and also includes all state, interstate, and
intermunicipal agencies.

(i) “Publicly owned” means owned by a municipality.

(j) “Severely disadvantaged community” means a community
with a median household income of less than 60 percent of the
statewide median household income.

SEC. 36.  

Section 13477.6 of the Water Code is amended to
read:

13477.6.  

(a) The State Water Pollution Control Revolving
Fund Small Community Grant Fund is hereby created in the State
Treasury.

(b) The following moneys shall be deposited in the grant fund:

(1) Moneys transferred to the grant fund pursuant to subdivision
(c).

(2) Notwithstanding Section 16475 of the Government Code,
any interest earned upon the moneys deposited in the grant fund.

(3) Any moneys deposited pursuant to Section 79723.

(c) (1) For any financing made pursuant to Section 13480, the
board may assess an annual charge to be deposited in the grant
fund in lieu of interest that would otherwise be charged.

(2) The charge authorized by this subdivision may be applied
at any time during the term of the financing, begin delete and end delete begin insert and, end insert once applied,
shall remain unchanged unless the board determines that the
application of the charge is any of the following:

(A) No longer consistent with federal requirements regarding
the fund.

(B) No longer necessary.

(C) Negatively affecting the board’s ability to fund projects that
support its water quality goals.

(3) The charge shall not increase the financing repayment
amount as set forth in the terms and conditions imposed pursuant
to this chapter.

(4) If the board ceases collecting the charge before the financing
repayment is complete, the board shall replace the charge with an
identical interest rate.

(d) (1) Moneys in the grant fund, upon appropriation by the
Legislature to the board, may be expended, in accordance with
this chapter, for grants for wastewater projects described in
subdivision (c) of Section 1383 of Title 33 of the United States
Code that serve small communities as defined in subdivision (a)
of Section 30925 of the Public Resources Code. The board shall
expend moneys appropriated from the grant fund within four years
from the date of encumbrance.

(2) For the purpose of approving grants, the board shall give
priority to projects that serve severely disadvantaged communities.

(3) In addition to the uses set forth in paragraph (1), moneys
deposited in the grant fund pursuant to Section 79723, upon
appropriation by the Legislature to the board, may be expended
for technical assistance as authorized by Section 79725.

SEC. 37.  

Section 13480 of the Water Code is amended to read:

13480.  

(a) Moneys in the fund shall be used only for the
permissible purposes allowed by the federal act or a federal grant
deposited in the begin delete fund end delete begin insert fund, end insert to the extent authorized and funded by
that grant.

(b) Consistent with expenditure for authorized purposes, moneys
in the fund may be used for the following purposes:

(1) Loans that meet all of the following requirements:

(A) Are made at or below market interest rates.

(B) Require annual payments of principal and any interest, with
repayment commencing not later than one year after completion
of the project for which the loan is made and full amortization not
later than 30 years after project completion unless otherwise
authorized by a federal grant deposited in the fund to the extent
authorized and funded by that grant. Loan forgiveness is
permissible to the extent authorized by a federal grant deposited
in the fund to the extent authorized and funded by that grant.

(C) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of a loan.

(D) (i) Contain other terms and conditions required by the board
or the federal act or applicable rules, regulations, guidelines, and
policies. To the extent permitted by federal law, the combined
interest and loan service rate shall be set at a rate that does not
exceed 50 percent of the interest rate paid by the state on the most
recent sale of state general obligation bonds and the combined
interest and loan service rate shall be computed according to the
true interest cost method. If the combined interest and loan service
rate so determined is not a multiple of one-tenth of 1 percent, the
combined interest and loan service rate shall be set at the multiple
of one-tenth of 1 percent next above the combined interest and
loan service rate so determined. A loan from the fund used to
finance costs of facilities planning, or the preparation of plans,
specifications, or estimates for construction of publicly owned
treatment works shall comply with Section 603(e) of the federal
act (33 U.S.C. Sec. 1383(e)).

(ii) Notwithstanding clause (i), if the loan applicant is a
municipality, an applicant for a loan for the implementation of a
management program pursuant to Section 319 of the federal begin delete Clean
Water Act end delete begin insert act end insert (33 U.S.C. Sec. 1329), or an applicant for a loan
for nonpoint source or estuary enhancement pursuant to Section
320 of the federal begin delete Clean Water Act end delete begin insert act end insert (33 U.S.C. Sec. 1330), and
the applicant provides matching funds, the combined interest and
loan service rate on the loan shall be 0 percent. A loan recipient
that returns to the fund an amount of money equal to 20 percent
of the remaining unpaid federal balance of an existing loan shall
have the remaining unpaid loan balance refinanced at a combined
interest and loan service rate of 0 percent over the time remaining
in the original loan contract.

(2) To buy or refinance the debt obligations of municipalities
within the state at or below market rates if those debt obligations
were incurred after March 7, 1985.

(3) To guarantee, or purchase insurance for, local obligations
where that action would improve credit market access or reduce
interest rates.

(4) As a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds issued
by the state, if the proceeds of the sale of those bonds will be
deposited in the fund.

(5) To establish loan guarantees for similar revolving funds
established by municipalities.

(6) To earn interest.

(7) For payment of the reasonable costs of administering the
fund and conducting activities under begin delete Title end delete begin insert Subchapter end insert VI
(commencing with Section 601) of the federal act (33 U.S.C. Sec.
1381 et seq.). Those costs shall not exceed 4 percent of all federal
contributions to the fund, four hundred thousand dollars ($400,000)
per year, or one-fifth of 1 percent per year of the current valuation
of the fund, whichever amount is greatest, plus the amount of any
fees collected by the state for this purpose regardless of the source.

(8) For financial assistance toward the nonfederal share of the
costs of grant-funded treatment works begin delete projects end delete begin insert projects, end insert to the
extent permitted by the federal act.

(9) Grants, principal forgiveness, negative interest rates, and
any other type of, or variation on the above types of, assistance
authorized by a federal grant deposited in the begin delete fund end delete begin insert fund, end insert to the
extent authorized and funded by that grant.

SEC. 38.  

Section 79702 of the Water Code is amended to read:

79702.  

Unless the context otherwise requires, the definitions
set forth in this section govern the construction of this division, as
follows:

(a) “Acquisition” means obtaining a fee interest or any other
interest in real property, including easements, leases, water, water
rights, or interest in water obtained for the purposes of instream
flows and development rights.

(b) “CALFED Bay-Delta Program” means the program
described in the Record of Decision dated August 28, 2000.

(c) “Commission” means the California Water Commission.

(d) “Committee” means the Water Quality, Supply, and
Infrastructure Improvement Finance Committee created by Section
79787.

(e) “Delta” means the Sacramento-San Joaquin Delta, as defined
in Section 85058.

(f) “Delta conveyance facilities” means facilities that convey
water directly from the Sacramento River to the State Water Project
or the federal Central Valley Project pumping facilities in the south
Delta.

(g) “Delta counties” means the Counties of Contra Costa,
Sacramento, San Joaquin, Solano, and Yolo.

(h) “Delta plan” has the meaning set forth in Section 85059.

(i) “Director” means the Director of Water Resources.

(j) “Disadvantaged community” has the meaning set forth in
subdivision (a) of Section 79505.5, as it may be amended.

(k) “Economically distressed area” means a municipality with
a population of 20,000 persons or less, a rural county, or a
reasonably isolated and divisible segment of a larger municipality
where the segment of the population is 20,000 persons or less,
with an annual median household income that is less than 85
percent of the statewide median household income, and with one
or more of the following conditions as determined by the
department:

(1) Financial hardship.

(2) Unemployment rate at least 2 percent higher than the
statewide average.

(3) Low population density.

(l) “Fund” means the Water Quality, Supply, and Infrastructure
Improvement Fund of 2014 created by Section 79715.

(m) “Instream flows” means a specific streamflow, measured
in cubic feet per second, at a particular location for a defined time,
and typically follows seasonal variations.

(n) “Integrated regional water management plan” has the
meaning set forth in Part 2.2 (commencing with Section 10530)
of Division 6, as that part may be amended.

(o) “Long-term” means for a period of not less than 20 years.

(p) “Nonprofit organization” means an organization qualified
to do business in California and qualified under Section 501(c)(3)
of Title 26 of the United States Code.

(q) “Proposition 1E” means the Disaster Preparedness and Flood
Prevention Bond Act of 2006 (Chapter 1.699 (commencing with
Section 5096.800) of Division 5 of the Public Resources Code).

(r) “Proposition 84” means the Safe Drinking Water, Water
Quality and Supply, Flood Control, River and Coastal Protection
Bond Act of 2006 (Division 43 (commencing with Section 75001)
of the Public Resources Code).

(s) “Public agency” means a state agency or department, special
district, joint powers authority, city, county, city and county, or
other political subdivision of the state.

(t) “Rainwater” has the meaning set forth in subdivision (c) of
Section 10573.

(u) “Secretary” means the Secretary of the Natural Resources
Agency.

(v) “Severely disadvantaged community” has the meaning set
forth in Section 116760.20 of the Health and Safety Code.

(w) “Small community water system” means a community water
system that serves no more than 3,300 service connections or a
year-long population of no more than 10,000 persons.

(x) “State board” means the State Water Resources Control
Board.

(y) “State General Obligation Bond Law” means the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code).

(z) “State small water system” has the meaning set forth in
subdivision (n) of Section 116275 of the Health and Safety Code.

(aa) “Stormwater” has the meaning set forth in subdivision (e)
of Section 10573.

(ab) “Water right” means a legal entitlement authorizing water
to be diverted from a specified source and put to a beneficial,
nonwasteful use.

SEC. 39.  

Section 79726 is added to the Water Code, to read:

79726.  

For the purpose of providing the state share needed to
leverage federal funds to assist communities in providing safe
drinking water, any funds appropriated for the purposes of Section
79724 shall be available for deposit in the Safe Drinking Water
State Revolving Fund, created by Section 116760.30 of the Health
and Safety Code, prior to expenditure.

SEC. 40.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.